Toledo homes may not be selling rapidly, but income-generating rental properties are.
Thirteen apartment complexes were auctioned off in Toledo this week as one of the largest commercial auctions in the area by the Pamela Rose Auction Co. LLC.
Up for bid were 17 properties with up to 28 units each, and 40 potential buyers participated at the event in Gladieux Meadows in south Toledo.
http://toledoblade.com/apps/pbcs.dll/article?AID=/20080516/BUSINESS06/80...
AUCTION. That doesn't mean normal economic happenstance. It means distress.
I'm laughing a lot at these signs of "Foreclosure Bus Tours". A crash after a bubble always involves people catching falling knives. As prices ramped up from speculator to speculator -- each taking their incremental profit -- so must the prices fall, in the property passing from loss-taker to loss-taker. The loss-takers buy in purely since they believe the bottom has been reached. But no asset-speculation bubble collapses in less time than the run up, and that was about 5 years. Prices for houses in Toledo won't rise until about 2013, minimum (noting we have to add extra time for the extensive government interference in the market, a la bailouts and such). That's a long time to be making large mortgage payments that you really can't afford just on the ignorant gamble that you could flip out of the property in 6 to 12 months.
I wish the buyers of these complexes good luck, but I have to really ask what the F*CK they think they're doing, since rents in the area must fall. More and more foreclosed properties will enter the supply market. When supply rises, and demand stagnates, what happens to prices? Toledo is also at the 1950 level for population, and gives every appearance that further population drop will happen. Where's all this demand for rent? Remember, each one foreclosure doesn't exactly produce a demand for one rental, since some doubling-up with relatives and friends will occur, but even the rental demand from the foreclosure can be matched to the same house since when it doesn't sell it is STILL RENTED OUT.
Here's more of the deceit from the REIC (Real Estate Industrial Complex), from the article:
"Rental properties are a strong investment, said Mrs. Rose."
"Plus, she said, tougher requirements for obtaining mortgages have increased the numbers of people looking to rent rather than buy, Mrs. Rose said."
Somebody ought to tell Mrs. Rose that the vacancy rate for housing (condos, houses, apartments) is now at the highest level ever recorded (since the early 1950s). The nation is in a large housing glut. So that does that tell you about what will happen to prices?